Gartner Sees Desktop Sales Holding Steady

Despite a new operating system from Microsoft and continued performance brawling between AMD
and Intel , the desktop PC market is looking rather boring for the next few years, with modest sales but no real surprises.

That's the jist of a new report from Gartner, which predicts worldwide PC shipments in 2007 will hit 255.7 million units, a 10.5 percent increase from 2006. The research firm also projected that PC revenue sales will reach $213.7 billion, a 4.6 percent increase over last year.

The one notable shift in non-server computing is the continued trend of replacing desktop PCs with laptops.

"Our view is mobiles are supplanting desktops and it's going to take place steadily over the next few years, and that will be a factor in holding the desktop space down," George Shiffler, research director for Gartner, told internetnews.com.

In fact, Gartner was originally expecting a 9.9 percent growth rate for 2007 but bumped it up on growing mobile computing strength. Of the $255.7 million units, $101.5 million machines will be in mobile sales, or roughly 40 percent of total sales.

"It used to mean moving to mobile meant you had to sacrifice performance and that's not the case and mobiles are coming down in price, so that's driving people to them as well. Plus, they have technical enticements like wireless networking," said Shiffler.

In other Gartner findings, emerging markets such as Latin America, Russia, China, India and eastern Europe will grow at three times the rate of mature markets, including U.S., western Europe, Japan and other parts of Asia like Korea, Taiwan and Singapore.

These emerging markets will grow 18.4 percent compared to the 5.3 percent growth of mature markets. However, those mature markets still represent 60 percent of the volume, so they still hold sway.

One of the issues facing PC vendors is that there is less incentive to upgrade because PCs have become so powerful, thanks to the advanced processors and other technologies.

That trend continues, with the average lifespan before replacement for a desktop now four years, versus three and one quarter years for notebooks, which take a lot more abuse than a desktop.

Shiffler said that with such powerful desktops, the replacement cycles aren't likely to be longer. However, the risk of that happening remains a possibility.

"An element of worst case scenario is replacement cycles get lengthened, and in a mature market like the U.S. where replacements are driving growth, that's not good news," he said.

One thing that won't drive PC replacements is Vista. Its presence in the business world will come very slowly and through new installations but no one is rushing to embrace it, Shiffler said.

"I think the hope was at one point that it would drive a major replacement cycle but we don't see that happening at all. Our position was that Vista wouldn't drive the market and that has not changed," he said.